SINGAPORE -- Singaporean water company Hyflux announced Friday that a financial restructuring agreement with United Arab Emirates-based utility company Utico is no longer in effect.
Hyflux reached a $290 million deal with Utico last November under which Utico was to have invested cash into the embattled Singaporean company in return for a 95% stake. A creditors meeting was scheduled for April but was postponed due to the novel coronavirus outbreak.
As the economic picture clouded, Utico requested a change in the terms of the agreement on Tuesday and unilaterally announced that instead of the cash it had previously offered to Hyflux's creditors, it would give them Utico and Hyflux shares.
Hyflux said it is examining Utico's new proposal, while allowing the current agreement to lapse.
Utico is not Hyflux's only possible backer. A Spanish water management company, for example, has shown interest in a deal with Hyflux. The company said it will continue negotiating with potential sponsors. But the sharp economic downturn brought on by the coronavirus pandemic makes it very likely that any deal Hyflux reaches with another suitor will be less favorable than the one it thought it had with Utico.
The Hyflux restructuring has drawn attention because the company was once seen as a star in the city-state, and thousands of Singaporeans had invested in its securities. But the water company collapsed in May 2018 with $2 billion in debt after a failed move into the power generation business.
Hyflux has been here before. A rescue package was on the table from a consortium led by Indonesian conglomerate Salim Group, but the deal fell through in October 2018. Hyflux has a moratorium on debt payments that expires at the end of July.